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Comment by freedomben | Hacker News Reader

> Almost no one thinks their code is copyrightable or seriously thinks their code is a moat.

You'd be surprised! Among non-software management types, they often think of the code as extremely valuable IP and a trade secret. I'm a CTO and I've made comments before to non/less technical peers about how the code (generally speaking) isn't that big of a secret, and I routinely get shocked expressions. In one case the company almost passed on a big contract because it required disclosure of the source code (with an NDA). When I told them that was a silly reason and explained why, they got it, but the old way of thinking still permeates and is a hard habit to break.

Edit: Fixed errant copy pasta error. Glad that wasn't a password :-)

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Totally agreed.

I work in M&A. Nearly every lawyer, accountant, investor, and software business owner thinks their code is solely valuable and a trade secret. I find it hilarious and try to be as diplomatic as possible about why it's not. They also willfully will give their client list to a potential acquirer but get super cagey they moment a third party provider asks for their code to be scanned.

This argument easily gets shut down when I asked why, Twitch, a $1B business didn't crater to their competition when their full codebase was leaked.

You're right, I guess maybe I mean in any serious actionable way. Senior, non technical people leave plenty of money on the table by thinking they're protecting something valuable or they have some kind of secret sauce. It's all silly is what I meant to say, and digging into the technicalities of whether your code is truly copyrightable is kind of pointless. It's all vibes.

The place where it concretely matters is M&A due diligence. Acquirers are now routinely asking about AI tool usage in development and running license scans as a condition of closing. A codebase that cannot demonstrate human authorship over its core IP, or that contains GPL contamination, creates a representation and warranty problem in the purchase agreement. For most companies day to day you are right. For the companies that get acquired or raise institutional capital, the question becomes very concrete very quickly.

Very interesting, I had no idea. That's probably going to be a very painful lesson learned by all the startups that have been pumping out AI code. I know of several just among my peer groups that will be shocked and dismayed by this. Thanks for sharing that!

That is exactly the gap the piece is aimed at. The M&A conversation is where this becomes concrete very fast, and most founders shipping AI-assisted code have not had it yet.

Eh, it does and it doesn't. PE investors actively are asking why more of the portfolio companies aren't generating codebases using Claude Code. You are right that lawyers are asking about code generated by LLMs but this is more of a CYA out of ignorance more than anything else (btw - many purchase agreements have funny representations like "your code is free of bugs" which is downright hilarious).

So these two things are squarely at odds with eachother...meaning, I don't know any PE acquirers who are actively terminating deals because the target acquisition's code is generating by an LLM even if the lawyers try to get a rep about it in the purchase agreement.

For the record, I still have yet to have an M&A lawyer explain to me unilaterally that AI generated code is an infringement...hence the question "who owns the code Claude Code writes" is still open.

The tension you are describing is real and the piece does not capture it well enough. PE acquirers pushing portfolio companies toward Claude Code while their lawyers are adding AI code reps to purchase agreements is exactly the gap that will produce the first painful deal. The rep usually survives unsigned because neither side has done the analysis. When the first deal falls apart or a rep is breached post-close because of GPL contamination in an AI-assisted codebase, that will set the market standard faster than any court ruling.

> When the first deal falls apart or a rep is breached post-close because of GPL contamination in an AI-assisted codebase, that will set the market standard faster than any court ruling.

Assuming it ever does...first, GPL is hardly enforced and second, I feel like there is going to be enough money (e.g. Anthropic's own code it uses for the harness) that pushes back against it being problematic. We'll see.

I’ve worked at too many places where I mused that if someone gave the source code to the competitors, it’d likely drive the competitors out of business as they tried to use it.

Keeping it proprietary probably has the greatest value in preserving the company’s reputation…

Maybe LLM coding agents change the equation by making it much easier to adapt and use foreign and probably incomplete code. Getting you closer to competing with the original authors in a shorter amount of time than generating new code from scratch.

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